| The Tax Publishers2020 TaxPub(DT) 4009 (Jp-Trib) INCOME TAX ACT, 1961
Section 54F
Only condition laid in section 54F is that either a residential house is purchased or constructed a house for residential purposes in stipulated time, meaning thereby of 'construction of a house for residential purpose' is that some construction should be made by assessee on the plot, whether assessee is physically residing or not in that house, is all immaterial and said condition was fulfilled by assessee by constructing a house for residential purpose on plot purchased by her, therefore, there was no merit in declining the assessee's claim of exemption under section 54F.
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Capital gains - Exemption under section 54F - Plot purchased was of the commercial nature -
Assessee had sold a land which was held jointly by her husband and her two sons and claimed exemption under section 54F. The said land was an agricultural land. Total sale consideration was shown in the sale deed of Rs. 1,52,00,000 out of which 40% share was belonging to the assessee with her minor son. This had been shown by assessee in her return of income. However, Stamp authority valued land at Rs. 1,91,13,876 for stamp purposes and AO had taken 40% share of that value, i.e., Rs. 76,45,550 instead of Rs. 60,80,000 and applied section 50C with reduction in the cost of acquisition. AO disallowed assessee's claim of deduction under section 54F on the ground that plot on which construction was made, was of commercial nature and copy of agreement for construction and payment of receipts were on plain paper and assessee has not furnished any evidence to prove the source of payment. Held: The only condition has been laid in section 54F is that either a residential house is purchased or constructed a house for residential purposes in stipulated time, meaning thereby of 'construction of a house for residential purpose' is that some construction should be made by assessee on the plot, whether assessee is physically residing or not in that house, or whether plot on which house has been constructed is of commercial or agricultural nature, is all immaterial. The said condition was fulfilled by the assessee by constructing a house for residential purpose on the plot purchased by her from JDA on auction and said house was consisted of two rooms, boundary wall with iron gate, electricity connection, etc., and house was constructed within stipulated time. All the conditions of claiming deduction under Section 54F were fulfilled by assessee and all relevant details/evidences submitted before AO. Therefore, there was no merit in declining the assessee's claim of deduction under section 54F.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 54F
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